Holderbank reports solid growth

Holderbank's cement works at Siggenthal Keystone Archive

The cement manufacturer, Holderbank, says net profits increased by 11.4 per cent last year to SFr886 million ($514 million), thanks to robust markets in Europe and Latin America.

Presenting the results in Zurich, Holderbank said this year had started well and it predicted higher margins as new plants in the United States came into operation and costs were cut in Latin America, Asia and Oceania.

Net sales were up by 14.9 per cent last year to SFr14.012 billion, while cash flow from operations rose sharply to SFr2.557 billion.

Commenting on the results, chairman and managing director, Thomas Schmidheiny, said the group had also profited from a strong United States dollar.

“The markets were strong in Latin America, while Europe has contributed after the heavy restructuring we made some years ago. We took two million tonnes out of the production process and that is paying off handsomely,” he told swissinfo.

Holderbank, which announced a name change last week to Holcim, said it was pursuing a balanced growth strategy.

“Our main area of focus is emerging markets with above-average growth potential, where we are concentrating on those countries in which we do not yet have a presence,” Schmidheiny said. “We are also giving a high priority to strengthening our commitment to companies in which we have minority shareholdings.

“Balanced growth is one of the main pillars we have. We want to be present in the main markets. We’ve built up our positions very successfully in the Latin American markets during the 1980s and 90s. We went in very rapidly in the ASEAN countries and are the number one cement producer in this market of 500 million people,” he said.

As far as acquisitions are concerned, Holderbank says the ongoing consolidation in the cement industry offered takeover opportunities.

The company has been trying to increase its 10 per cent strategic stake in Portugal’s Cimpor but its efforts so far have been blocked. The Portuguese government is selling its 10 per cent stake in the company.

However, France’s Lafarge, which overtook Holderbank as the world’s largest cement producer last year, is also interested in an alliance.

With a view to new Swiss legislation due to come into force on May, the group is planning a five-for-one split of shares to increase appeal and liquidity. Holderbank is also proposing to raise the dividend to SFr25 per bearer share.

Commenting on the name change to Holcim, Schmidheiny said that in the past Holderbank had often been confused with a bank and had at times even been put under banking regulations in a number of countries.

“We firmly believe that a distinct logo and a shorter name will help to give us a higher market profile while drawing attention to our principal product, cement,” he said.

by Robert Brookes